The U.S. is turned on to wine

WINEWe're catching up to the French in consumption of it, estimates say

WALTER NICHOLLS, Washington Post

Published 6:30 am, Wednesday, January 2, 2008

Photo: BILLY SMITH II, CHRONICLE

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ACTIVE SHELVES: Experts estimate that the United States reached record consumption of 304 million cases of wine in 2007, much of it bought at supermarkets.

ACTIVE SHELVES: Experts estimate that the United States reached record consumption of 304 million cases of wine in 2007, much of it bought at supermarkets.

Photo: BILLY SMITH II, CHRONICLE

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SALUD: Publicity about the potential health benefits of red wine is partly responsible for higher wine consumption, a report by Impact Databank says.

SALUD: Publicity about the potential health benefits of red wine is partly responsible for higher wine consumption, a report by Impact Databank says.

Photo: D. Fahleson, CHRONICLE FILE

The U.S. is turned on to wine

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Americans are drinking more and better wine and love a dependable bargain bottle, which is increasingly easier to find. And with every sip we are breaking records: For the 15th consecutive year, wine consumption in the United States is projected to have risen in 2007, after a 4 percent gain in 2006.

Projected estimates for 2007 have the nation reaching a record 304 million cases of wine consumed. That will, for the first time, place the United States ahead of Italy in per-capita consumption, trailing only France, according to the 2007 wine market report by Impact Databank. At the current rate of growth, Americans will overtake the French by 2015.

A host of factors have contributed to the steady rise, the report says, including publicity about the potential health benefits of red wine, sustained increases in the number of new drinkers of legal age, growing numbers of women with high incomes in the work force and, more important, how wine is marketed.

Industry consultants say wine has become more approachable. Something as simple as an image of an animal on a label, such as Yellow Tail's bouncing wallaby, has broken down barriers.

"Highfalutin turns people off," says wine consultant Jon Fredrikson, publisher of the Gomberg-Fredrikson Report. "People see Yellow Tail, the largest-selling brand in U.S. food stores based on volume, and they say, 'Gee, this is down-to-earth.' "

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The growth is also fed by accelerated competition from an ever-expanding world of winemakers who vie for a spot on the retail shelf with as many 13,000 products.

On a more local level, "the story of the Texas wine industry is growth," says the Texas Wine and Grape Growers Association. In just six years between 2000 and 2005, according to the organization's statistics, the number of Texas wineries jumped from 40 to 113. Now, barely three years later, it counts 138 wineries. Texas, the association adds, ranks fifth nationally in in wine production among states.

"People are battling it out to deliver quality at every price point," Fredrikson says. "You have wonderful wines for the money: plenty of wines under $10, and 90 percent of all wine, by volume, is sold in a food store for below $10."

Still, buyers are not necessarily looking for the cheapest bottle in the bin.

"People expect higher quality in everything they buy, and wine has become a badge of quality," says Barbara Insel of MKF Research in St. Helena, Calif. Five years ago, wine drinkers were spending $6 to $8 a bottle; now the number is up to $10 to $15. "I call it the Costco definition of value. They are not looking for cheap wine. They are looking for a deal on quality."

Americans continue to prefer chardonnay above all other varieties, with sales of 64 million cases projected in 2007, according to Wine Spectator magazine. That is the wine most consumers know best.

"It's the wine that baby boomers discovered when they first discovered wine," says John Gillespie, owner of Wine Opinions, an Internet-based company that provides wine-industry research.

But a survey released this month by the firm found that chardonnay has fewer fans among younger drinkers. The most devoted chardonnay drinkers are 60 or older, with 38 percent counting it as a favorite. Tastes are changing, however.

"There is a decided trend away from the overblown, unctuous, often sweet chardonnay with too much oak, and greater interest in chardonnay without oak or barrel fermentation," Gillespie says.

Women continue to buy more wine than men. But younger men are discovering wine. "The typical 21-to-35 male is a beer drinker when he is with other males. But when he is with a woman he drinks wine, because wine is considered less rowdy," Insel says. "And these young people have little brand loyalty. They don't care where it comes from or about the label."

Analysts say reasonably priced domestic, South American and Australian wines will continue to be attractive to U.S. consumers, but European wines, with the drop in the value of the dollar, will lose some appeal: They will rise in price by 10 percent to as much as 30 percent in the coming year.